Board governance and acquirersâ€™ returns: A study of Australian acquisitions
AbstractThis paper examines the relation between acquirer (abnormal) returns and governance characteristics of the board of directors of the acquiring firm. The central question is: Are higher (acquirer) abnormal returns associated with â€˜betterâ€™ board governance, having controlled for other factors that can affect returns? As acquisitions represent a significant change in the acquirerâ€™s corporate structure and operations, the determinants of a successful acquisition are of considerable importance. We examine the relation between returns and governance variables using a sample of 80 Australian acquisitions that occurred between 1999 and 2005. We use both short-run and long-run (abnormal) returns to capture the wealth effects of the acquisitions. We find very limited evidence of a connection between our governance variables and acquirer returns.JEL Classification:G14, G34.
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Bibliographic InfoArticle provided by Australian School of Business in its journal Australian Journal of Management.
Volume (Year): 36 (2011)
Issue (Month): 2 (August)
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Web page: http://www.agsm.edu.au
acquirer returns; acquisitions; board governance;
Find related papers by JEL classification:
- G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
- G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
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- Pascal Nguyen & Nahid Rahman, 2014. "Which Governance Characteristics Affect the Incidence of Divestitures in Australia?," Working Paper Series 180, Finance Discipline Group, UTS Business School, University of Technology, Sydney.
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